Government Debt

FEATURED ARTICLES ABOUT GOVERNMENT DEBT - PAGE 2

MUMBAI: Purchase of Indian government bonds will get easier for foreign institutional investors as the regulator scrapped the rule that they purchase permits from the markets regulator in an auction before they actually buy bonds. Government bond purchases for foreigners will now be on par with corporate debt where they can buy freely up to 90% of the $51-billion limit. Once their holdings reach 90%, they have to buy permits from Sebi. Foreigners' ownership of Indian government bonds is capped at $25 billion.

WASHINGTON: India has an exposure worth $59 billion to the US government securities, amid growing concerns over possible debt default by the world's largest economy. However, the country's holding of US Treasury securities, which stood at $59.1 billion in July, is the second lowest among the BRICS nations. India has trimmed its exposure in July compared to holdings worth $61.2 billion seen in June, according to official figures from the Treasury department. In January this year, the exposure of India to these securities stood at $58.5 billion which came down to $56.8 billion in February.

MUMBAI: Market regulator SEBI on Tuesday said that a foreign instituional investor (FII) can investment up to Rs 1,000 crore in government debt. "No single entity shall be allocated more than Rs 1,000 crore of the government debt investment limit," market regulator Sebi said in a circular. The circular added that unutilised investment limits for government debt will be allocated to the FIIs in the same manner as the corporate debt. SEBI has issued the circular while modifying the norms for allocation of debt investment limits for FIIs which were announced in February.

An outcome budget measures the development outcomes of all government programmes. For instance, it will tell a citizen if money has been allocated for building a primary health centre, has indeed come up. In other words it is a means to develop a linkage between the money spent by a government and the results which follow. The concept has developed in many democracies to make budgets more cost effective. According to experts it signals the emergence of an important tool for effective government management and accountability.

MUMBAI: The move to set up a separate Public Debt Management Agency (PDMA) to manage market government borrowings and public debt and also a Monetary Policy Committee for inflation targeting may reduce the powers of the central bank, says analysts. The proposals are a way of curtailing the powers of the Reserve Bank, apart from increasing the debt burden on the nation, a leading tax and banking expert said. Noting that RBI has been doing a commendable job in handling public debt management, Ashvin Parekh, a leading financial services expert who retired from EY and is currently the managing partner of Ashvin Parekh Advisory Services, said the move is unfair on the RBI. "The move to set up a separate PDMA is a bit drastic for reducing the powers of RBI as it comes with many pre-conditions.

NEW DELHI: As foreign investors remain bullish on Indian markets, leading bourse NSE will auction on Monday investment limits for overseas institutional investors in government debt securities worth Rs 3,161 crore. The auction follows aggregate overseas investments in government debt securities yesterday reaching Rs 1,21,271 crore, which is 97.46 per cent of total permitted limit of Rs 1,24,432 crore. As per capital markets regulator Sebi's guidelines, the unutilised debt investment limits for FIIs need to be auctioned on an exchange platform when the aggregate investments of all overseas investors reach or breach 90 per cent of the investment limit.

WASHINGTON: India's holding of US government debt securities has declined for the second consecutive month, even as many other countries including China, Japan, Brazil and Russia hiked their exposure to American treasury bonds . As per the latest data released by the US Department of Treasury , India's holding of treasury securities stood at $58.9 billion (over Rs 3,20,000 crore) at the end of October 2012 - marking the second straight month of decline after an uptrend for seven continuous months.

As the world struggles with growth deficit due to higher leverage and unattractive demographic profile of the developed world, emerging economies are reporting much stronger structural as well as cyclical rebound in growth. China and India being the fastest-growing economies in the world (in that order) accounted for 11% of the nominal world GDP in 2010; as per the International Monetary Fund ( IMF ), this figure is expected to rise to 34% by 2030. India posted a GDP growth of 8%+ CAGR between the years 2003 and 2010 and is poised for a much stronger structural progress as it boasts of an under-leveraged consumer and a productive demographic profile that adds over 1 crore people to the earning population every year.

ROME: Italy is close to finding a way to pay off huge public sector debts owed to private companies without pushing up the public debt, outgoing Prime Minister Mario Monti said on Monday. Italy's public administration, struggling to curb costs to try to balance the budget, is notoriously slow in settling its bills to private companies that provide it with goods and services and has accumulated a debt of more than 80 billion euros. The government has been pressing the European Commission to grant it leeway to allow it to start settling these arrears without contributing to public debt calculations and important progress has now been made, the prime minister said.

NEW DELHI: Government debt rose 0.4 per cent to over Rs 40.83 lakh crore in the January-March period of 2012-13 fiscal, over the previous quarter. "This (Rs 40,83,040 crore debt) represented a quarter-on- quarter increase of 0.4 per cent (provisional) compared with an increase of 4 per cent in the previous quarter (Q3 of FY13)," the Quarterly Report on Debt Management said today. The debt was Rs 40,64,755 crore as of December 2012. The internal debt constituted 91.1 per cent of the public debt, compared to 90.7 per cent in October-December quarter.